Senate vote to probe Etisalat’s $1.2bn loan crisis

The Senate, on Tuesday, voted in favour of launching an investigation into the default on a $1.2 billion loan earlier this year by Etisalat Nigeria and into how the funds were used.

Etisalat Nigeria, now called 9Mobile, took out a syndicated loan from 13 Nigerian banks but failed to make repayments earlier this year.

The Senate, in an order paper published on Twitter said it is aware of allegations that the loans had been diverted to other uses not related to the business, as there was no evidence of what the company did with the loans.

The vote mandated the Senate Committee on Banking and National Security to launch an investigation, which, if required, will pass its findings on to regulators including the financial crimes agency.

In its order paper the Senate also raised questions over the Abu-Dhabi listed parent company Etisalat, which subsequently terminated its management agreement with its Nigerian business and gave up its 45 percent stake.

The motion said that, as of 2016, Etisalat Nigeria had started defaulting on its $1.2 billion loan obligations leading to a few bailouts from its parent company in Abu Dhabi.

The document also said it was understood that about 42 percent of the loan has been repaid, “remaining an outstanding debt of $696 million representing 58 percent of its capital, which Etisalat has failed to serve since 2016”.

Senate President, Bukola Saraki said after the vote that it was important to launch an investigation to protect jobs, corporate governance, and investment climate in the country.

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